Microfinance In Our Backyard
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Microfinance In Our Backyard

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A webinar with Grameen America and ACCION USA

A webinar with Grameen America and ACCION USA

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    Microfinance In Our Backyard Microfinance In Our Backyard Presentation Transcript

    • Microfinance in Our Backyard
      Hosted by Grameen America & ACCION USA
    • The Need for Domestic Microfinance
      • 1 in 7 or ~44 million people in the U.S. live in poverty (*28 million of these are women)
      • 20 million microenterprises in the United States, but less than 1% are receiving credit or business assistance
      • 400%-3,000% interest rates are charged by some alternative lenders, such as loan sharks and fringe banks
      “FY 2008 Program Performance Data Overview”. FIELD: Aspen Institute
    • Impediments to Domestic Entrepreneurs
      Loan amounts offered too big
      Most banks issue loans averaging $194,000
      There are 700 microenterprise programs in the U.S., 369 have a loan average of $35,000
      Poor credit history
      Min. Required = mid 650s
      Avg. = mid 750’s
      Insufficient business history
      Businesses are start-ups, off the books, initial phases
      Group vs. Individual
      Independent business culture
      Looser ties to community
      Gender Breakdown
      Men primary owners of small businesses
      Barrier to Entry
      Start up and operational costs are much higher
    • Grameen America’s Mission
      To provide affordable microloans to financially empower low-income entrepreneurs:
      • Capitalto invest in a small business to create self-employment
      • Financial Literacy and education opportunities
      • Mentoringand strong support network to build communities
      • Access to Savings and a path toward establishing a credit history
    • Grameen America Operational Overview
      ProvideCapital
      • Low cost loans support income generating activity
      • Maximum first loan is $1500
      • 6 to 12 month terms
      • Lent out $17MM
      • 99% Repayment Rate
      Build Savings
      • Members open savings account with local bank
      • Minimum $2 per week savings encouraged
      • $750,000 deposited
      Establish Credit
      • Repayments reported to Experian
      • Many borrowers have no prior credit history
      • Building scores of > 640
      Develop
      Financial Literacy
      • Borrowers participate in 5-day training, where
      they learn loan terms, open savings account &
      develop business plan.
      • Weekly meetings foster financial education.
      • Minimum of 55 hours of training
    • Grameen America Model
      5
      2
      3
      1
      5 days
      $
      Complete training /
      Start saving
      Form group
      4
      NEW
      LOAN
      6-12 months
      Repay loan
    • Grameen America Borrowers
      Live below the poverty line
      Average income in 2009 was $15,000
      90% single mothers
      Interest and determination to start a business
      Nowadays there are not many jobs out there so someway we need to survive. We’re making it and Grameen America has helped us do that. - Lisette, GA Borrower
    • Facts about ACCION USA
      History:
      Pilot program in Brooklyn, New York in 1991
      Locations:
      New York, Boston, Atlanta, Miami and Internet loans (serving over 46 States)
      ACCION USAempowers entrepreneurs
      to invest in their business, family and
      community through financial literacy
      and capital.
    • ACCION USA Portfolio
      65% Latino
      20% African American
      40% Women
    • Client Snapshot
      • 87% are low-to-moderate income
      • 90% are minority
      • 75% have lived in U.S. over 10 years
      • 38% are home-based businesses
      • 45% are first-time borrowers
      20% African American
      Source: 2009 Impact Study and ACCION USA Portfolio as of 12/31/2010
    • Loan Process and Requirements
      • Credit score of 575 or more.
      • Have not have declared bankruptcy in the past 12 months or foreclosure in the past 24 months
      • Have not had any late rent or mortgage payments in the past 12 months
      • Be up-to-date on all bills
      • Exhibit steady cash flow and the ability to support monthly loan payments.
      • Be able to provide a cosigner, if needed
    • ACCION USA Impact
      The business survival rate among ACCION USA
      clients is 98% for established businesses
      and 89% for start-up businesses.
      We create sustainable
      businesses
      • Lent out $131MM
      • 92% repayment rate
      On average, each ACCION USA small business
      loan recipient creates 3 jobs
      (including the borrower).
      We create employment
      in low-to moderate-income
      communities
      • 30,000 clients served
      Jobs created by ACCION USA borrowers
      pay 33% more ($10.80/hour) than the
      federal minimum wage ($7.25/hour).
      We create fair wages
      • 65, 000 jobs created
      We improve quality
      of life
      Clients reported a 19% median increase in
      take-home pay in the midst of economic distress.
      • 46 states served
    • Join us at Microfinance USA Conference May 23-24th in New York City!
      • Microentreprenur Client Tours – only a few spots spots left to see microfinance in action!
      • Social Entrepreneurship and Microfinance with Susan Davis and Jessica Jackley
      • Adam Davidson from NPR’s Planet Money
      • Student price $75, one-day tickets are now available for non-students.
      Register today at www.microfinanceusaconference.org